I received a mortgage demand letter. What should I do now?

The client problem

Fear causes clients to avoid the letter while interest and legal fees continue. By the time help is requested, a refinance that once fit the equity may no longer work.

A practical Ontario example

The letter demands arrears and costs within a set period. The client may negotiate, refinance or sell, but each route needs documents, appraisal and legal time. Delay reduces the chance of an orderly solution.

How the lending routes may differ

• Existing lender: may accept an arrears plan or payout, but obtain any agreement in writing.
• Alternative/B: may refinance where stable income and remaining equity support the new payment.
• MIC/private: may provide short-term payout funding with a strong exit; compare it with an immediate controlled sale.

Policy boundary: FCAC expectations discussed here apply to federally regulated financial institutions and do not require every lender to offer the same relief.

Questions to ask now

• What deadline applies?
• Has a notice of sale been issued?
• What is the full payout today?
• Can refinancing close before the legal deadline?

Rajiv’s practical view

Use the lawyer to interpret the notice and the broker to test financing at the same time. One cannot replace the other.